Fraud?
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Fraud? - 9/25/2006 11:13:08 PM
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adjustersteve
Posts: 2
Joined: 3/5/2005
Status: offline
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I'd like to get your input on this.
Here's the situation. An insured files a claim on a building and the adjuster paid the claim, ACV, as he should based upon damages found. However, the insured never intended to make repairs and had even made plans to tear down the building. The insured plans to used the insurance pay out for repairs and renovations on other buildings on the property. Is this profitting from an insurance claim? Is this just a smart thing to do on the part of the insured or a case of fraud.
Let's add a twist. Lets say the property is a business and the buiness owner has secured a contractor who has submitted an estimate for the repairs that need to be made knowing that the damages will never be repaired, but rather the money will be used for remodelling other buildings on the property.
Bottom line is the insured is getting paid to make repairs he never intends to make. But, is he owed the actual cash value of the items that were damaged even though he plans to use the money for something else.
Your opinions are appreciated.
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RE: Fraud? - 9/26/2006 12:05:41 AM
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dcmarlin
Posts: 145
Joined: 2/10/2006
Home base: Morrison, CO
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Based on your post, does not appear to be any fraud involved.
Let's say the insurance company paid you the ACV on your damaged shed and, instead of rebuilding it, you decide to go to Disney World. They paid according to the contract. What you do with the money is up to you. Of course, you can't make a claim for RC benefits. Now if there is a lienholder involved, different story.
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RE: Fraud? - 9/26/2006 12:07:41 AM
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swink_d
Posts: 260
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Home base: Lexington, NC
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He's not being indemnified to the repairs he's going to make. He's being indemnified to what he lost.
As long as there is no other parties with an interest to the claim he can pretty much do what he wants.
and no if his ACV is actually what he lost due to a covered peril. then he is not being bettered
thats my opinion. .
edit: If I had just waited 1 more minute to start typing. I could have just agreed with Mr Marlin : )
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RE: Fraud? - 9/26/2006 12:18:16 AM
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PORTASATGUY
Posts: 338
Joined: 9/15/2005
Home base: Homeless
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No fraud Involved. Carrier owes to place back to original state before storm damages.
_____________________________
R. Estes
Life is short LIVE IT!
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RE: Fraud? - 9/26/2006 3:54:19 AM
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racko
Posts: 241
Joined: 2/17/2006
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I don't see any problem. Look at it this way...his car got hit by hail & the carrier paid for the damages. Choice is to repair or not repair.
Now, if the car is sold "as is", and the new owner then tries to claim the hail damage... the "F" word applies.
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RE: Fraud? - 9/26/2006 7:28:54 AM
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adjustersteve
Posts: 2
Joined: 3/5/2005
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Thanks for the responses - excellent insight on this. Very much appreciated.
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RE: Fraud? - 9/26/2006 8:16:35 AM
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ALANJ
Posts: 108
Joined: 4/19/2004
Home base: BIRMINGHAM, AL
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The contract of insurance is based upon cost to repair or replace. Either ACV or RCV. It never says you have to do the repairs unless you intend to collect RCV. Read the policy!!!! How could this be fraud?
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RE: Fraud? - 9/26/2006 9:10:43 AM
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Tiger
Posts: 28
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Home base: Fort Lauderdale, FL
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Like I tell the insured whenever they ask me if they need to perform repairs the exactly the way I write my estimate.........You can upgrade, you can downgrade, you can spend every penny on beer and pizza if you want to. The carrier owes to replace what you lost - not what you want.
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RE: Fraud? - 9/26/2006 9:53:35 AM
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Tom_Toll
Posts: 560
Joined: 4/19/2004
Home base: Austin, AR
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If an insured wants to tear down building and intentionally causes damage and turns in a claim, that is fraud. If an insured wants to tear the building down and something happens to it caused by a named peril and tears it down later, that is not fraud. Contracts of insurance are not hypothetical. They are contracts of indemnification and must be adhered to by the carrier, regardless of future intent of the insured. If it was an RCV policy, he would not be entitled to recovery if he tears the building down.
_____________________________
Success is not final, failure is not fatal: it is the courage to continue that counts.
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RE: Fraud? - 9/26/2006 11:45:11 AM
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rass3742
Posts: 131
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Home base: Spokane, WA
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Also keep in mind that if he fails to make the repairs, then another storm hits later (before he had a chance to tear it down), that the original damages should be deducted from the "overall" damages after the second storm. If the insd tries to claim the original damages, along with additional damages, after the second storm, he has now stepped into the fraud arena.
As to your original post, everyone who responded above is absolutely correct; the insd can take the ACV money and do whatever he wants with it.
_____________________________
Things are never so bad they couldn't be worse.
Count your blessings.
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RE: Fraud? - 9/26/2006 1:21:32 PM
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Tiger
Posts: 28
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Home base: Fort Lauderdale, FL
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quote:
ORIGINAL: rass3742
Also keep in mind that if he fails to make the repairs, then another storm hits later (before he had a chance to tear it down), that the original damages should be deducted from the "overall" damages after the second storm. If the insd tries to claim the original damages, along with additional damages, after the second storm, he has now stepped into the fraud arena.
By the same token, if that damage was never reported and the insured claims the damage was a result of the second storm - it is fraud as the policy pays per occurrence and not per reported claim......but good luck proving it.
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